Canada updates

Arbitration & ADR

Attempting to consolidate arbitral and non-arbitrable disputes can compromise arbitration agreements
  • Canada
  • 28 March 2019

The Ontario Superior Court recently considered the application and operability of an arbitration clause in a subcontract in the context of a related claims proceeding under a related main contract. The case highlights the challenges involved in drafting pre-dispute arbitration clauses that will operate effectively when multiple claims arise between multiple parties under multiple contracts.

Court of appeal declares notice to arbitrate null due to its attempt to achieve consolidation without consent
  • Canada
  • 17 January 2019

The British Columbia Court of Appeal recently declared a notice to arbitrate a nullity because it sought to commence four separate arbitrations against three different parties under four separate arbitration agreements. Practitioners and parties entering into multiple contracts relating to the same subject matter or project should consider whether it is desirable to have all potential disputes which arise under the multiple contracts arbitrated in one proceeding.

Consolidation of arbitration proceedings without consent: cautionary tale
  • Canada
  • 06 December 2018

In a decision that is inconsistent with the weight of Canadian and international jurisprudence, the Court of Queen's Bench of Alberta recently ordered the consolidation of arbitration proceedings without the consent of all parties. For now, parties and practitioners should be aware that arbitrations seated in Alberta may be subject to consolidation without consent.

Court clarifies when international arbitral awards become binding
  • Canada
  • 27 September 2018

The Ontario Court of Appeal recently interpreted when an international commercial arbitration award becomes binding on the parties for the purposes of judicial recognition and enforcement of foreign arbitral awards. It held that the determination of whether an award is binding pursuant to Articles 35 and 36 of the United Nations Commission on International Trade Law Model Law rests with the court rather than the arbitral tribunal.

Quebec court consolidates law on third-party funding agreements: impact on commercial arbitration
  • Canada
  • 28 June 2018

Third-party funding in commercial arbitration in Canada has moved increasingly into the mainstream. Its implementation is largely influenced by the treatment of third-party funding in litigation, which is why it is important for arbitration practitioners in Canada to continue to follow jurisprudential trends regarding the treatment of third-party funding. A recent third-party litigation decision from Quebec provides valuable insight for arbitrators in this regard.


Aviation

Contributed by Bersenas Jacobsen Chouest Thomson Blackburn LLP
Quebec court rules 'one passenger one ticket' policy applies in class action
  • Canada
  • 15 May 2019

The Quebec Superior Court of Justice recently ruled against Air Canada in a class action brought by passengers with disabilities, their attendants and obese passengers who had been required to pay for additional seats on flights. This decision confirms that carriers that do not abide by a 'one passenger one ticket' policy may be liable for discriminating against passengers with disabilities and obese passengers who require more than one seat.

Superior Court rules on entitlement to lost luggage compensation
  • Canada
  • 03 April 2019

The Ontario Superior Court of Justice recently ruled that in order to claim damages for lost luggage under the Montreal Convention, a passenger need not have personally checked the luggage. This decision partially affirms a decision of the province's Small Claims Court, in which the deputy judge held that, despite only one passenger in a group having checked in all of the bags, each passenger had been entitled to claim damages for lost luggage.

Class action regarding flight passes denied certification
  • Canada
  • 06 March 2019

The Quebec Supreme Court recently declined to certify a class action based on the application of certain sections of the Consumer Protection Act or its Alberta equivalent to flight passes sold by Air Canada. This decision is notable for carriers selling flight passes, as it clarifies the types of transaction which are subject to consumer protection laws. Carriers which sell gift cards representing a fixed monetary value should be aware of their obligations under consumer protection laws.

Federal government proposes air passenger protection regulations
  • Canada
  • 23 January 2019

The Canadian Transportation Agency is seeking a public review and comment on proposed air passenger protection regulations. Among other obligations, the proposed regulations require that carriers communicate clearly with passengers regarding their rights and recourses, entitle passengers to be rebooked in the case of delay or cancellation and – in certain circumstances – provide passengers with accommodation.

Federal Court finds that Air Canada violated Official Languages Act
  • Canada
  • 12 December 2018

In a recent case that dealt with Air Canada's duty to serve passengers in both of Canada's official languages (English and French), the Federal Court held that the airline had violated a passenger's right to be served in French. The court found that Air Canada had failed to serve a passenger in French during an incident where the passenger had been involuntarily removed from a Canada-bound flight from Fort Lauderdale and when the airline later sent him a copy of its tariff in English in response to the incident.


Banking

Does offshore banking confidentiality hold up in Canadian courts?
  • Canada
  • 02 June 2017

Some jurisdictions' laws make it a criminal offence for banks to disclose client information. If a bank becomes involved in Canadian proceedings, those foreign laws may conflict with the disclosure obligations imposed on litigants in Canada. This raises questions about when foreign law can provide a basis to excuse production or refuse the answering of a question in Canadian proceedings, and under what circumstances a Canadian court will compel disclosure despite potential foreign legal jeopardy.

FCAC reinforces express consent expectations
  • Canada
  • 26 May 2017

The Financial Consumer Agency of Canada (FCAC) has issued a statement and a new compliance bulletin in response to recent allegations that certain employees of banks were pressured to upsell to consumers. The bulletin states that its purpose is to reinforce FCAC expectations that federally regulated financial institutions obtain consumers' express consent for new products and services in accordance with regulatory requirements.


Corporate Tax

Contributed by Thorsteinssons LLP
Budget 2019: intensifying fight against tax evasion and new risks for tax professionals
  • Canada
  • 19 April 2019

In Budget 2019 the federal government has continued to bolster its tools and resources to detect and prosecute tax evasion. As such, several measures have been proposed, including a C$150.8 million investment over the next five years to fund new initiatives. More so than ever, tax professionals should be well acquainted with various definitions to ensure that their client services and advice cannot be construed as the commission or facilitation of a criminal offence.

Federal government tables 2019 Budget: investing in middle class
  • Canada
  • 12 April 2019

The minister of finance recently tabled the 2019 Budget. As a pre-election budget, the government appears to have shied away from tax measures that could receive negative backlash from the business community. Among other things, the government is proposing to expand the foreign affiliate dumping rules to apply to Canada-resident corporations that are controlled by non-resident individuals or trusts.

Continued erosion of taxpayer privacy
  • Canada
  • 22 February 2019

The Canadian Broadcasting Corporation recently reported that the Canada Revenue Agency has transferred more than 1.6 million Canadian banking records to the US Internal Revenue Service since the intergovernmental agreement for the enhanced exchange of tax information under the Canada-US Tax Convention was entered into in 2014. The agreement provides lengthy and detailed rules with respect to the information that the Canadian government must transfer to the United States.

TFSA advantage tax: heads CRA wins, tails you lose
  • Canada
  • 14 December 2018

Earnings within tax-free savings accounts (TFSAs) and other tax-deferred plans are, in principle, supposed to grow tax free. However, some taxes still apply, including the advantage tax which applies at the rate of 100% of any 'advantage' (as defined in the Income Tax Act). This tax has become one of the Canada Revenue Agency's favourite tools to effectively expropriate what it views as improperly boosted returns within a TFSA.

Federal Court refuses to authorise abusive fishing expedition by CRA
  • Canada
  • 14 September 2018

The Federal Court has made a strong statement against an interpretation of the Canada Revenue Agency's (CRA's) powers that would allow almost unlimited invasions of taxpayer privacy. The force with which the court rejected the self-serving interpretation advanced by the CRA should be encouraging for taxpayers. The case serves as an important reminder that the CRA cannot act outside the bounds of law and that it is the courts, and not the CRA, that interpret the law.


Employment & Benefits

Contributed by Fasken
Cost of intimidation: what not to do when terminating employees
  • Canada
  • 22 May 2019

A recent Court of Appeal decision demonstrates the high cost of bad faith when terminating a senior employee for cause. The decision reads as a how-to guide in reverse (ie, what not to do when terminating an employee) and highlights that employers should not (among other things) refuse to inform a terminated employee as to why they are alleging cause or file baseless counterclaims.

How respectful workplaces can reduce risk of successful constructive dismissal claims
  • Canada
  • 15 May 2019

The British Columbia Supreme Court recently considered how employers can properly address workplace conduct to minimise the risk of constructive dismissals. This case not only offers a useful summary of the law on poisoned workplaces, but also offers employers several practical suggestions on how to reduce this risk, including by implementing a respectful workplace policy and treating complaints seriously.

Canadian gig economy: embracing the future of work
  • Canada
  • 08 May 2019

Canada has recently seen its lowest unemployment rate in nearly 40 years. However, despite this positive economic indicator, a majority of surveyed Canadians are experiencing a psychological recession. Such economic anxiety may be symptomatic of the uncertainty surrounding the modernisation of the Canadian economy and changes to the nature of work. The best way to respond to this economic anxiety is arguably to embrace the gig economy as part of the future of work.

When are mandatory arbitration clauses unenforceable?
  • Canada
  • 24 April 2019

A recent Ontario-based decision creates uncertainty for many Canadian and international employers operating in Canada that include mandatory arbitration clauses in employment or independent contractor agreements, because each province has a similar rule against contracting out of employment standards legislation. If the clauses could be interpreted as limiting the right to file a complaint with the Ministry of Labour or another employment standards regulator, they should be reviewed and revised by the company's lawyers.

Between a rock and a hard place: employer faces competing statutory obligations
  • Canada
  • 17 April 2019

How can an employer balance its obligation to maintain a safe workplace for its employees with its duty to accommodate an employee who has serious mental health issues? According to a recent arbitration award, an employer may inadvertently breach one statutory obligation by satisfying another. A single employee's rights – even human rights – cannot be considered in isolation and to the exclusion of the rights of all others.